Nippon’s H1 2024 core profit surges 36% despite premiums decline

New annualised premiums for individual and annuity insurance fell by 1.8% YoY.

Nippon Life reported a 2.8% year-on-year (YoY) decline in consolidated premiums for the first half of 2024 (H1 2024), totalling $25.97b (¥3,995.6b). Despite the decline in premiums, Nippon Life achieved a 36.0% YoY increase in consolidated core profit, which reached $3.16b (¥486.6b).

This growth was driven by higher interest and dividend income from Nippon Life and Nippon Wealth Life, alongside an 82.2% rise in investment spread results to $1.55b (¥238.1b) and a 4.9% increase in insurance-related results to $1.47b (¥226.9b).

This decline was mainly attributed to a 9.1% drop in bancassurance sales, which fell to $4.49b (¥691.1b), and a 10.8% decrease in group annuity premiums, amounting to $3.28b (¥504.7b).

New annualised premiums (ANP) for individual and annuity insurance fell by 1.8% YoY to $1.62b (¥248.5b), primarily due to weaker sales through the bancassurance channel.

For FY 2024, Nippon Life expects a decline in insurance and service revenue due to reduced contributions from Nippon Life and Nippon Wealth Life, following strong growth in the prior year.

However, the company anticipates core profit to increase further, targeting $5.85b (¥900b) for FY 2024, driven by higher interest and dividend income.

CreditSights said despite the slowdown in premium growth, Nippon Life’s strong capital adequacy and robust core profit growth reflect its solid market position and financial fundamentals.

CreditSights continues to view Nippon Life as a leader in the industry, supported by its significant market presence and strong credit profile.

($1.00 = ¥153.59)